The Financial Benefits of Solar Energy

Electricity Savings

A solar electric system's primary function is to provide electricity for your building.  You save money by generating your own power instead of using the power from your electricity provider.  An average residential system in New Jersey (for example) will produce approximately 8,400 kWh every year.  At a $0.16 per kWh, you'll save $1,344 in the first year.  With skyrocketing electricity prices, you could easily save over $15,000 in just 10 years by owning a solar electric system.   

Incentives 

Incentives vary from state to state and whether the system is for commercial purposes or for a home. States with incentives typically have rebate-based incentives, production-based incentives or a combination of the two.  States that provide incentives typically attempt to achieve the following financial returns:

• For Homeowners
  • A simple payback of 10 years or less
• For Commercial Owners
  • A rate of return equal to or greater than 12%

All states leverage the federal incentives to achieve the numbers presented above.   

How Rebate-Based Incentives Work

For those states that provide rebates or grants, you will receive a dollar per watt ($/W) rebate check after the system is installed.  As an example, if you install a 10 kW system and there is a $3/W rebate, you will receive a check from the state for $30,000.  Many solar installation companies may require you to pay the full amount for the system and you have to wait for your refund.  At Trinity, we deduct the rebate from the amount you owe us and you simply assign the rebate to us.  We wait for the state to make the payment to us even if it takes 6 months to get paid.

How Production-Based Incentives Work
Some states use production-based incentives to reward the solar electric system owner for producing as much electricity as possible.  This type of incentive is tied to how much energy you actually produce in units of MWh (which equals 1,000 kWh).  A common production-based incentive used on the East Coast is Solar Renewable Energy Credits.  In New Jersey (as an example), for every MWh generated by your system, one SREC will be provided to you by the state.  You then can trade that SREC to a utility that needs it to meet their Renewable Portfolio Standard requirements.  SRECs currently trade between $200 and $300 for each one traded.